Recently, the Federal Executive Council (FEC) awarded a contract of $3.1 billion for the modernisation of the Nigeria Customs Service (NSC) to a foreign firm; Messers E-Customs HC Project Limited for a period of 20 years.
Following the announcement of the contract, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said that the main objective of the contract is to completely automate every aspect of the Customs’ business and institutionalise the use of smart and emerging technologies to enhance the statutory functions of the NCS in the area of revenue generation. Ahmed, however, said the project would be at no cost to the government because sponsors and partners would source the fund.
The minister said the Nigerian Customs currently has some level of automation services but it’s not all of its servers that are automated, adding that the project is an end-to-end automation of all of Nigeria’s Customs Service processes and it’s going to bring huge value to the country, which she said it has the potential to yield up to $176 billion of revenue.
However, the announcement of the deal has been stoking fire especially among the maritime stakeholders who described the contract as a way of mortgaging the future of Nigerians through the back door.
The stakeholders said the whole contract is shrouded in secrecy and it should be resisted because no major stakeholders were consulted or know the details of the Memorandum of Understanding (MoU) of the contract.
It was reported last year that there was a move by forces in the presidency to concession the NSC to the private sector for 20 years, which migh have compromised national security.
However, on October 10, 2019, Chairman of House Committee on Public Petitions, Jerry Alagbaoso, moved a motion that the Customs modernisation deal should be investigated. The lawmaker then alleged that there are some foreign companies who are very eager to sponsor, finance and provide technical services to what they call the modernisation of Customs, without recourse to the National Assembly.
Now that the modernisation deal has been finalised in 2020, maritime stakeholders are asking for details about the 20 years modernization contract while calling on the Federal Government to make the details public.
Meanwhile, a former Comptroller General of the Nigeria Customs Service, Mr. Haman Bello, has called on Nigerians to demand for the details of the contract.
Bello, who spoke at one of the national Television stations, said:
“Are the concessionaires bringing in their equipment, install them and train Customs to carry out their statutory responsibilities or are they the ones that will collect duty for the government?”
Speaking on the potential of the $176 billion revenue from the automation project, Bello said more explaination is needed, saying that the minister should give further clarification on the $176 billion.
“On concessionaire reinvestment, if they put the equipment on ground, they should be making $200 billion for the period of 20 years. For the duration of 20 years, multiply the $20 billion dollars on a monthly basis, then it will give you about $200 billion. If they are getting $176 billion deficit, that means there is a shortfall of $24 billion. The case on the side of the Federal Ministry of Finance is to publish the details of the contract to enable Nigerians understand the scope of the contract.”
Meanwhile, Vice President of Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto, called for a review of the modernisation contract, saying that government has already awarded a contract for the purchase of scanning machines, which is yet to arrive at the port.
He said that with the arrival of scanners, the modernisation of customs has commenced already; all that needs to be done is strengthening of the Pre-Arrival Assessment Report (PAAR) ruling centre in Abuja.
“I have said this several times that we are having a situation whereby we may be mortgaging our future through the back door. The so-called contract is shrouded in secrecy, we dont know the details of the MoU, the only thing we heard is that the contract is going to last for 20years, this is not ideal. Even if there is going to be a contract like that, it ought to be for three to four years for a start, and with a proviso that if you do not deliver, the contract would be terminated, but now that you have issued a contract for 20 years, somebody is playing foul play.
“The contract is shrouded in secrecy and as Nigerians, we need to know the details, and, as a stakeholder, we need to know what is embedded in the contract. We would not just say because FEC approved it, then it is okay. The problem with our government is that they carry out decisions without stakeholders’ inputs, and this is why they don’t succeed. The contract must be reviewed.”
Another stakeholder, Chidi Anthony Opara, said the problem is that some of these fiscal policies are reeled out without consultation with Customs and those who ought to work with Customs as freight forwarders.
He said even the senior Customs officer just heard these things the same way ordinary people heard it in the news. He added that issues concerning Customs, government or the Ministry of Finance do not consult Customs and they just reel out the policies.
“However, if somebody is talking about modernisation of Customs, which aspect are you modernising? If it is ICT, I would understand that ICT system in the western country is far more sophisticated than what is obtainable here in Nigeria. Maybe the people that are taking the decision within ICT operation in that level but when they now set aside people collecting at the tune of whatever and you expect people to raise certain amount of money and give foreigner and the rest of them.
“Did you look at the security implication? I agree that a lot of government revenue falling into private hands, into the hands of unscrupulous element in Customs and among the freight forwarders. However, you can enhance the Customs revenue collection by blocking these loopholes and make Customs efficient. If you make Customs efficient, your revenue generation efficiency will improve. You don’t even solve the problem by giving it to somebody who you are not even sure of his or her loyalty to come there to generate money and the rest of them,” he added.
He said there is need for government to make Nigeria an industrial economy so that Customs can also collect a lot of money from excise duty. He said now that Nigeria is focusing on revenue, which is import duty.
“Then, import duty that Customs is collecting, the collection system has so many loopholes that what is suppose to be in government coffers does not because of unscrupulous element in Customs and freight forwarders, which I mentioned earlier,” he added.